False Education In Our Colleges And Universities
by Emil O. Jorgensen, 1925

An Expose of Prof. Richard T. Ely and His “Institute for Research in Land Economics and Public Utilities”

[NOTE: The main contents of this book first appeared in series of articles written by the author for the monthly BULLETIN of the Manufacturers and Merchants Federal Tax League beginning July, 1924, and ending November, 1925. With the exception of eleven chapters which for lack of space, were omitted in the BULLETIN, and the addition of illustrations, the articles have been reprinted approximately as they appeared then.]

I. Introduction: See below
II Prof. Ely’s Institute—The Origin and Growth
III An Examination of Prof. Ely’s three Books
IV Prof. Ely answers our Charges

Chapter I — Introductory

In June, 1924, we published in the BULLETIN of the Manufacturers and Merchants Federal Tax League, under the caption “Prostituting a Great State University,” a brief editorial questioning the good faith of the ” Institute for Research in Land Economics and Public Utilities”—an organization located in the University of Wisconsin[1] and the Direc­tor of which is Prof. lR:ichard T. Ely of the Department of Economies.[2]

The substance of our editorial was that while this so-called “Institute for Research” has its domicile inside of the University, with a staff made up largely of professors from the University, “it is, from all that we are, able to find out, not financed by the University, but is supported entirely by private funds from the outside—funds contributed in the large by certain corporations and economic groups seeking to have privilege and monopoly taxed less and industry and consumption taxed more.” We ended our editorial by urging all business men, farmers and other producers, if they value their liberties, to keep an eye on this “Institute.”

Since this editorial appeared some highly interesting letters have been received from men and women in all parts of the country. Not a few of those writing to us—a good many more in fact than we thought there would be—have stated frankly that our editorial did not take them completely by surprise, that for some time past the suspicion has been strongly growing on them that the “Institute for Research in Land Economics and Publie Utilities,” is not exactly what it claims to be. Others have simply expressed amazement and astonishment at our remarks, but with the understanding that they would reserve judgment until a later day, while still others again have treated our editorial with profound contempt and attacked us with all the bitterness that they could muster for writing as we did.

We expected of course a merciless denunciation from certain quarters but we never anticipated such a cloud-burst of fire and brimstone for “spilling the beans” as we received. We are plainly told in some of these letters that our assertions regarding Professor Ely and the “Research brimstone Institute” over which he is Director, are not only “ridiculous and absurd,” but “damnably false” from first to last; that “the Institute is not being financed by anybody from the out­side but is being supported by the University itself;” that even if it were financed by interests from the outside “there is no intention whatever to play into the hands of privilege;” that the sole purpose of the Institute” is not propaganda in any shape or form” but an absolutely” impartial and unprejudiced research into all the facts pertaining to land economics;” that the “high character of Professor Ely and his assistants in the State University of Wisconsin is a distinct guarantee that no selfish interests will be served;” and that our “insinuations to the contrary,” are an “infamous slander of Professor Ely and the high-minded men who are working with him.”

For which presumably we should be promptly hung, drawn and quartered!

Perhaps if some of our good correspondents had examined the evidence against Professor Ely and his “Institute” given on pages 280-288 of the recently published Report of the National Tax Relief Convention of the Manufacturers and Merchants Federal Tax League —a report which can be secured at any public library—they might not have been so hasty to chastise us in the manner that they have. But since some of them apparently have not read this Report a few additional remarks may not here be out of place.

If it be true, as some of our readers tell us, that the “Institute for Research in Land Economics and Public Utilities” is not being financed by private funds outside of the University, why is it that Professor Ely has never made a denial of this charge? Why, if the university is supporting the Institute—as any work carried on within a State University and bearing the stamp of approval of that University should be supported—why is it that the good Professor does not make this fact clear? Moreover, how does it come that evidence is at hand to show that large sums are being donated to the Institute by self-seeking groups from the outside—donations that total up from all sources, if our information is correct, to an amount between $40,000 and $50,000 a year?

The fact of the matter is that the Institute whose headquarters are within the State University of Wisconsin is not being supported by the University—as the public welfare demands that it should be, and as some of our correspondents seem to think—but is being supported by various privileged individuals and monopolistic organizations from the outside whose past record shows that they are decidedly more interested in advancing their own personal gains than in contributing to the common good.

But the financing of the “Institute for Research in Land Economics and Public Utilities” by private funds, while significant, is not the worst thing that can be said against it. Two other charges may be named that are much graver than this. They are:

1. That the Institute is not a bona fide “research” organization, as it claims and pretends to be.
2. That the underlying purpose of the Institute is not the “impartial investigation” of principles and facts that will lead to knowledge, but subtle propaganda against certain far-reaching policies and in behalf of certain other policies—a purpose that Professor Ely emphatically denies.

Just what, in the language of Professor Ely, is the “Institute For Research in Land Economies and Public Utilities”? “It is,” he says, “an incorporated, non-profit, educational institution” located in the University of “Wisconsin and “organized for the purpose of making an exhaustive, impartial, painstaking and truthful research into all the facts pertaining to land economics, including taxation,”—the final object being of course to find the correct solution of our land and tax problems.[3]

How extensive shall the research work of the Institute be? It shall be nation-wide, even world-wide and will take many long years to complete. Professor Ely tells us that before the Institute is through “a series of over fifty volumes will be published on land economics and related subjects,” besides numerous “bulletins, reports and scientific monographs,”—a gigantic task but one which, he says, will allow “definite conclusions to be formed for the guidance of state, national and international policy.”

A truly great and noble effort—if sincere!

But there is one flaw in this vast and sweeping program. And it is a flaw that lets the whole cat out of the bag! The Institute begins its long task by announcing first, what could, in all logic and reason, only be announced last. It begins its work by laying down definite conclusions before it has gathered its facts. It starts off by vigorously declaring against certain far-reaching policies and in favor of certain other policies before it has made the necessary researches upon which any kind of policy can be based, and which researches, it says, it is going to make.

Now, there are many men and women of high and respected authority—and their numbers are steadily increasing, as an examination of the recently published Report of the Manufacturers and Merchants Federal Tax League will show—who hold that the only logical and true solution of both the land and tax problems is to abolish gradually all taxes on human industry and raise the public revenue from land values only. But the first three books published by this “Institute for Research”—three books called “The Outlines of Land Economics” and written by Dr. Ely himself for the guidance of the Institute in its future work—three books upon which the forty­seven or more books still to be issued by the Institute will be based—these three books are filled from first to last with every conceivable “argument” AGAINST the taxation of land values in any shape, form or manner!

Regardless of which side is right or wrong in the matter, can this procedure on the part of the Institute be called “research”? Is this “investigation”? Is this an “intelligent effort” and an “honest attempt” to dig out all the facts of the problem for the purpose of “finding the right answer” to our land and tax questions? We would call any physician who gave his prescription before he had made his diagnosis a quack. We would call any judge who sentenced a man before he had heard the evidence, a fakir or a fool. By the same token we must call any “Institute for Research” which lays down its conclusions before it has gathered its facts and which decides upon great public policies in advance of its investigations a sheer humbug and a fraud.

The real purpose of the “Institute for Research in Land Economics and Public Utilities” is plainly not research but propaganda. Its actual purpose is not, as it claims, to locate the correct solution of a great problem in land economics, but to hide this solution. That this is the real object of the Institute an abundance of evidence goes to show.

In the opinion of many leading men of authority—university professors, legislators, manufacturers, bankers, farmers, labor leaders, educators and other careful students of political economy—the only logical, sane and practical solution of the land and tax problems is, as has already been stated, to remove gradually all taxation from human industry and enterprise and to raise the public revenue by taxing the bare land of the nation, according to its value.

But this solution, while it would greatly benefit competitive business, industry and agriculture, would prove a death-blow to mere land speculation, monopoly of natural resources and legal privileges of various kinds. While it would enormously aid producers of wealth and all those who give service for service, it would, when fully applied, take away from the recipients of unearned incomes the billions they are now annually collecting from the people without rendering any return. Naturally, therefore, the beneficiaries of monopoly and special privilege do not like this solution, nor do they like the steady progress that knowledge regarding it is making among thoughtful people in all walks of life. Hence strenuous efforts are now being put forth by them to obscure the issue, to divert the people’s attention from it, and to prevent the true remedy for the ills of taxation and the evils of land monopoly from making further progress in the public mind. That the “Institute for Research in Land Economics and Public Utilities” is a subtle effort on the part of selfish interests to do this very thing, no one who has followed closely the activities of the Institute can doubt. Its primary purpose is not research, but propaganda. Its ultimate object is not to find the real remedy for the land and tax problems but to prevent this remedy from being found. These are serious charges. But if the charges are not true, why is the Institute struggling to mold public opinion away from the taxation of land-and-natural-resource values[4] instead of towards such taxation—especially when it is not a legitimate or proper function of any research organization to mold public opinion either one way or another!

Why, if the purpose of the Institute is “impartial and pain­staking research to find the solution of our land and tax problems,” and not “propaganda to prevent this solution from being found,” are the three basic books written by Dr. Ely himself for the guidance of the Institute in its future work, loaded with arguments against the taxation of land values in any shape or manner?[5] Why are hundreds of references given in these books to writers—many of them practically unheard of—who are known to be opposed to the taxation of land values and not one reference given to the numerous economists and great scholars who advocate such taxation? Is this the way that “impartial research work” should be conducted?

Why, if the object of the Institute is to “locate the correct solution of the land and tax problems” is it so intimately bound up with and supported by the very groups who have least to gain and most to lose by the pointing out of such a solution?[6]

Why does it favor raising more revenue from business, industry and consumption and oppose the raising of more revenue from the value of natural opportunities?

Why does it protest against any heavier taxation of vacant lands and idle natural resources—a policy that would have the most wholesome effect on the national prosperity—and urge the placing of heavier sales taxes on the food, clothing and shelter of the people—a policy that would only increase the cost of living and greatly add to the hardship of the public at large?

Why has it warned public utilities, railroads and other privileged organizations against fiscal measures that seek to tax the earnings of industry less and the unearned increment of land values more, and why is it even now cooperating with the National Transportation Institute—an association of railroad owners—in making a survey of city ground values and “finding results” that may aid in saving certain railroads hundreds of millions of unearned increment?

Why, if the aim of the Institute is “research” and not “propaganda” does it seek to arouse the farmer against the taxation of land-and-natural-resource values, when of all classes the farmer has most to gain by such taxation?

Why was the very first public statement issued by the Institute and signed by Professor B. H. Hibbard (a member of the staff), an attack on the Ralston-Nolan bill—a federal bill that had for its object the removal of a billion dollars of taxes from industry and consumption and a corresponding increase in taxes on the values of landed privileges and monopolies? Moreover why was this first public statement immediately published and distributed by the National Association of Real Estate Boards—an Association notorious for its defense of land speculators and rent profiteers, and whose first check for $3,000 to the Institute was just then being written out?

Finally why, if the purpose of the Institute is impartial and painstaking research to find the true solution of our land and tax problems and not propaganda to prevent this solution from being found is it so anxious, before it has gathered its “facts” or made its sweeping “investigations,” not only to cover the country with literature against the taxation of land values in any shape or form, but to have its students placed as “teachers” and “instructors in land economics” in all the high-schools, colleges and universities throughout the nation?[7]

We repeat it again: As an agency to advance the interests of industrial parasites and those who live on the sweat of other men’s faces, the privately financed but university-cloaked “Institute for Research in Land Economics and Public Utilities” may be an excellent thing, but as an agency to find the true remedy for our grave economic problems and to lead business, industry and agriculture out of the dangerous difficulties into which they have fallen, it is the most gigantic humbug and fraud ever imposed on the American people.

[1] [N.B.—This was written seventeen months ago. Since this time Prof. Ely has moved his Institute out of the State University of Wisconsin at Madison into Northwestern University at Evanston, Illinois,—the latter being a privately endowed institution noted for its conservatism and its friendliness for the monopoly powers-that-be. Although it is denied that the removal of Prof. Ely’s Institute out of Wisconsin was in any way due to compulsion, it is a curious fact that no sooner had Prof. Ely gone than the Board of Regents voted that no more money “shall in future be accepted by or in behalf of the University of Wisconsin from any incorporated educational endowments or organizations of like character.” See pages 154-155 of this book.]

[2] Among those appointed by Professor Ely to serve on the staff of his “Institute for Research” are: Richard T. Ely, Director, G. S. Wehrwein, M. G. Glaeser, B. H. Hibbard, Mary L. Shine, H. B. Dorau, Clam F. Widger, H. D. Simpson, E. W. Morehouse, E. W. Morehouse, etc….

[3] “The Institute for Research in Land Economics and Public Utilities, as the name indicates, is an educational institution organized for the purpose of conducting research in the important fields of land economics and public utilities … No solution is likely to be at all adequate that is not based upon on full knowledge of the facts, and this requires careful and painstaking research; not research alone of public agencies, but research also of adequately financed private organizations or agencies. … Our Institute is appealing for funds to carry forward adequately the researches urgently demanded in the public interest, including the taxation of land. … It is our belief that as we receive contributions from various sources and as we are entirely independent, obligating ourselves simply to search for the truth regardless of any special interests, our results should command confidence.”

Professor Richard T. Ely in the “Institute News,” June, 1924; “Organization and Purpose of the Institute for Research in Land Economics and Public Utilities, p. 8; and the “Taxation of Farm Lands,” p. 14.

[4] See his “Characteristics and Classification of Land,” “Cost and Income in Land Utilization,” and “Land Policies,” published by Edwards Brothers, Ann Arbor, Mich., 1922.

[5] Ibid.

[6] In sending its first check of $3,000 to the “Institute,” for instance, the Executive Secretary of the National Association of Real Estate Boards wrote the following letter to Prof. Ely (bold face ours): “I want to assure you that I think you are doing a splendid work, not only for the development in general of land economics, but for the benefit of our profession in Particular. Please accept my hearty congratulations on what has already been accomplished and be assured of my interest and support in your future efforts.”

[7] The Institute is striving in every way possible to have the results of its work spread as widely as possible. … One purpose of the teaching by the staff is to train workers for the Institute and for work in land economics and public utilities outside of the Institute. Men trained in land economics are wanted in the various state institutions of learning and in the United States Department of Agriculture. … Not only do we mean to extend the study of public utility and land problems in our universities and colleges, but we mean to extend our efforts in the direction of adult education. To this end we are co-operating not only with our own state university but also with other educational institutions of equal rank outside the state. Along the line of adult education we have associated with us the United Y, M, C. A. schools of the country, which, while not of University rank, are doing work of a high grade.”—R. T. Ely in the “Institute News,” June, 1924; also “Organization and Purposes of the Institute for Research in Land Economics and Public Utilities,” p. 8.